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Undisclosed End User #1

It is when it comes to bidding. Specifically Federal Government and State jobs. How many public schools (supported by tax payers) should have Tyco brands for product and labor (Exacq, Software House, Simplex and etc) in a government rfp\bid?

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Mark Jones

Finding out who pays US income tax and who doesn't would be an exhausting and detailed undertaking; well beyond the scope of IPVM, as John states. I am not exactly sure what your complaint is to be honest. I mean, yes I get the fact that they are not paying taxes and your corporation likely is. But, not knowing who you are or your circumstances, there are economies of scale at work here. Tyco is a huge multinational conglomerant. They are much bigger than just Exaq, or ADT or Simplex. When you study them, they are huge with their fingers into everything, all across the globe. Security is just a part of what they do. They, as the article states, are home-office (for tax purposes) in Ireland. That is not a new concept at all. It has been going on for years.

Ireland lowered their corporate tax rate several years ago to create a tax haven for Multi-nationals and to compete with primarily the Caribbean nations for that dollar. They figure some is better than none. (Interestingly enough, that strategy has come back to haunt them and they are considering increasing their corporate tax rate because their governement needs the money).

If you want to find fault with anyone at all, find fault with the US tax code which permits the practice. Deferral of Income from Controlled Foreign Corporations is the #1 Corporate tax break enjoyed by Multi-nationals and has been for some time now. There has been a very loud and vocal, albeit minority, that have opposed it for years. In principal, it is no different than any other tax break, be it alternative fuels, vacation home mortgages, large vehicle purchases, S-corp dividends, etc. Same principal, its just larger and it gets more attention. There are some I would think your accountant takes advantage of for you if he is any good at all. There is nothing illegal or immoral about it. It is the law.

Now don't get me wrong, I understand your indignence completely. They pay no taxes yet they win publicly funded jobs. I would also remind you, and I am not a fan of Tyco either, that they do provide jobs here, lots of them. They pay salaries, payroll taxes, 401k's, health insurance, and on and on. They do pay a lot of other taxes here. I am sure they pay their fair share of taxes from their perspective. I might also mention that no corporation truely pays taxes. When properly structured, a corporation should include it's taxes owed into the cost of goods sold. The consumer is actually paying the taxes. So if the tax rate goes to zero, it is better for the consumer, but it is a political nightmare for lawmakers. It looks bad.

Fundementally a corporation, regardless of size has one function. It exists to maximize it's profits for their investors. That is all they are doing. (I can't believe I am defending Tyco for antything).

A piece of advice I learned a long time ago. Don't spend any time worrying about the bids you don't win. You can't lose money you never had.

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Undisclosed End User #1

I'm not faulting or blaming anybody. What I'm doing is pointing out a possible weakness against a heavyweight that local and regional integrators could take advantage of.

Local and regional integrators need to work/network within their communities. If your local media/community leaders "make aware" that this CONGLOMERATE did not even pay $1 in Federal taxes in 2014, while making a massive profit, while various local area integrators paid their 30% (or whatever the norm is), it could possibly create a public backlash against these CONGLOMERATES that pay no taxes (The ones who purposely move out of the country to not pay taxes). Local bid specifications/rules/regulations could possibly be put in place.

Conglomerates, that pay no taxes, use PR moves every day. Maybe integrators, and even manufacturers, use PR moves to combat conglomerates. Nothing against Conglomerates, but others can play the same PR game.

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Mark Jones

We are fundementally on the same side. I would point out that they do pay an awful lot of taxes beyond income taxes, but that aside, I actually think that requirement could have some merit. It is rarely if ever written into a policy or an RFP, but I can't think of any legal reason (not a lawyer here) it could not. I know a few private companies that do it.

It has been my experience that those that craft RFP's actually have a vendor in mind when they publish it. (I have been on the receiving end of that a few times myself). They craft it and tailor it to keep out as many as possible.

I know that a few months ago our local school system put out a bid for CCTV. It was so tightly worded that not one local company could bid the job. Regardless of our qualifications or experience, none could not meet the pre-bid criteria. The loudest statement I can make is at the voting booth. Now the elected officials don't even know this happened. It was all done by a consultant who lived out of state.

I am not sure of this, but to use a tactic like that, might come off the wrong way. But I do get your point.

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Undisclosed #2

I might also mention that no corporation truely pays taxes. When properly structured, a corporation should include it's taxes owed into the cost of goods sold. The consumer is actually paying the taxes. So if the tax rate goes to zero, it is better for the consumer, but it is a political nightmare for lawmakers. It looks bad.

Mark, that's an interesting concept that's hard for me to get my head around. You don't mean actually including your estimated tax for the corresponding goods as a line item component in the COGS breakdown, do you?

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